This report analyzes the global marketplace elements to devise a business plan for Australian Natural Care in Pakistan. It discusses economic, social, and political factors, competitive strategy analysis, market entry analysis, and more.
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Running Head: AUSTRALIAN NATURAL CARE BUSINESS IN PAKISTAN INTERNATIONAL BUSINESS PLAN 2019 AUSTRALIAN NATURAL CARE BUSINESS IN PAKISTAN
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AUSTRALIAN NATURAL CARE BUSINESS IN PAKISTAN2 EXECUTIVE SUMMARY This report is intended towards the analysis of global marketplace elements to devise a business plan for Australian Natural care. In this report, I focused on developing an effective Australian natural care plan to build on the guidelines for starting operations in Pakistan. This report also discusses the various Economic, Social and Political factors in Pakistan at the moment and how they can influence the business model and decisions. In addition to this, I have also included the recommendations that will play a vital part in deciding the direction for his international business plan in hopes that it will help target the current market by learning and implementing the strategies that others are using to gain success. It will highlight my learning in terms of creating an effective marketing and business plan that can help a business initiate its operations in a new country with success. 2
AUSTRALIAN NATURAL CARE BUSINESS IN PAKISTAN3 CONTENTS INTRODUCTION.................................................................................................................................3 SELECTED COUNTRY BACKGROUND......................................................................................4 SWOT ANALYSIS...............................................................................................................................4 Strengths: -....................................................................................................................................4 Weaknesses: -................................................................................................................................4 Opportunities: -..............................................................................................................................4 Threats: -........................................................................................................................................5 ADDITIONAL ANALYSIS OF THE PAKISTANI MARKET............................................................5 COMPETITIVE STRATEGY ANALYSIS..........................................................................................6 MARKET ENTRY ANALYSIS...........................................................................................................7 1.Economic Financial Risk...........................................................................................................7 2.Political-Legal Factors...............................................................................................................7 3.Analysis of Cultural factors.......................................................................................................7 4.Technology Related Factors:.....................................................................................................8 MARKETING AND R&D CONSIDERATIONS.............................................................................8 MARKETING...................................................................................................................................8 1.Distribution Channels................................................................................................................8 2.Comparative Pricing Strategies..................................................................................................8 3.Advertising & Promotion...........................................................................................................9 4.Media Research.........................................................................................................................9 5.Service Quality Issues................................................................................................................9 6.Supply Chain.............................................................................................................................9 RESEARCH & DEVELOPMENT........................................................................................................9 RECOMMENDATIONS REGARDING PRODUCTION..................................................................10 INTERNATIONAL HRM ISSUES & CONSIDERATIONS..............................................................10 3
AUSTRALIAN NATURAL CARE BUSINESS IN PAKISTAN4 INTRODUCTION The following research paper is devised to tackle the issues pertaining to international business markets in Pakistan. It will aid the company namely Australian Natural Care in devising a business plan that will include how to better induce marketing strategies and other factors for efficiency (Stutely, 2012). Australian Natural Care is a healthcare company with the products related to pharma, health care, organic supplements and skincare. It is currently only operating in Australia. The SWOT analysis of the company in the previous assessment concluded that there is a need for improved wages and business practices which will motivate the Australia Natural Care workers. The strengths of the company include well-trained management that makes effective decisions for the company's goal achievement. The country of research is Pakistan, where research and studies prove is a lot of space for economic growth and ease of doing business as there are not many entrepreneurial companies operating in it. It is an understood fact that highlyproductivefirmsaremoreorganizedintheirworkandmakebetteruseof informational technology and its incorporation, which is also stressed upon in this research (McMillan & Rodrik, 2011). Foreign companies are always welcomed by the Government of Pakistan as they will help increase the economy, GDP and in general living standards and provide employment opportunities for the Pakistanis. The analysis in this research will be focused on how Australian Natural Care needs to focus on better innovation and adaptation of their products, what things they need to keep in mind while operating in Pakistan (Economic, Political and Social Factors), what their competitors are doing to reach their target audience and what more can be recommended to tackle the issues related to productivity and HRM in Pakistan. COMPANY BACKGROUND The selected company is Australian Natural care. It is one of the most reputable Australian companies that is known to deal with a variety of products within its market platform to reach a specifically targeted group of individuals. These products include; beauty and body products, healthy home products and even food products that are beneficial to the body system. Currently, the organization doesn't have any forms of existing international market activities. 4
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AUSTRALIAN NATURAL CARE BUSINESS IN PAKISTAN5 SELECTED COUNTRY BACKGROUND The selected country is Pakistan, a country located in a place with many important geographical aspects and four provinces namely, Khyber Pakhtoon Khuwa, Sindh, Punjab and Balochistan. It has Afghanistan, China, Russia and India as the immediate neighbouring countries. It also has access to the Arabian Sea and the Himalayan range of mountains. Pakistan's youth make up 60% of its population and will be the target market for Australian natural care products because they are more educated and health conscious. SWOT ANALYSIS Through the reference of the previous research-based assessment, a mode of analysis namely the SWOT analysis will reveal useful information pertaining to the Australian company divided into the following four sections; Strengths: -The first strength of the company is the availability of well-trained management personnel who are aware of how various issues should be handled within the organization. The top management of the company is capable of providing reliable and effective guidance that helps lead the organization towards their goals through the right path. The management also ensures that all goals are met through safe and proper means. The second important strength of the company is a set of well- documented rules and regulations that govern the way employees of the company operate in their respective areas of duty. These rules also help them implement the use of ethical considerations as required. Weaknesses: -The biggest weakness of the company is their underpayment of the employees which results in not only unsatisfied employees but also a place where they do not feel motivated to work at their best. The employees are at times subjected to heavy workloads with minimal salaries which will decrease their morale in working for the company. Opportunities: -Through the business development in Pakistan, the company will have a great opportunity in seizing a market that is ready for the health care products andonethatwillaidinthefutureexpansionstomeetneedsofcustomers internationally. Threats: -The biggest risk that the company can face is the availability of counterfeit products and this is one of the major threat for companies operating in Pakistan. 5
AUSTRALIAN NATURAL CARE BUSINESS IN PAKISTAN6 People are usually inclined towards cheaper products, and that may pose as a threat. Another threat that the company might face is the competition in the market when it comes to health care products that might prevent the company from operating efficiently. ADDITIONAL ANALYSIS OF THE PAKISTANI MARKET The following points reveal an additional analysis regarding the Pakistani market for business; 1. Halal certification is one of the biggest factors when it comes to consumer goods in Pakistan as it predominantly a Muslim state and this certification are associated with the religious beliefs of Muslims. Products that are not Halal are also said to be unhealthy for human consumption because of the way they are processed or prepared (Salman & Siddiqui, 2011). Due to religious reasons, the people of Pakistan generally refuse to purchase goods that are not according to Halal Certification terms; hence they will have to be checked for any substances or formulas that contradict this requirement. 2. Modern marketers will have to raise awareness in the Pakistani market regarding environmentally safe products and services through informative blogs, advertisements and other sources as it will create awareness and guide people about Australia Natural Care products with the added bonus of attracting customers that share the same belief as the company (Ali, Khan, Ahmed & Shahzad, 2011). Recent studies show that the Green purchase intentions of Pakistani consumers are associated with the following factors; Perceived product price & quality. The organization’s green image. Environmental concern. Environmental knowledge. Although there is a lack of knowledge and awareness in the Pakistani community regarding this spectrum, there is still a growing community that will increase in the coming years where people associate products with environmental safety (Ali & Ahmad, 2016). It is safe to say that going green will also provide the company with an edge over the other companies as well. 6
AUSTRALIAN NATURAL CARE BUSINESS IN PAKISTAN7 3. Usage of technology is not up to the maximum as entrepreneurs in Pakistan are not aware of its full capabilities and hence don't implement those in running their businesses effectively. Rising trends have made a difference in the use of technology but are not enough to compare it with the western world. It is a known fact through research that technology plays a vital role in the productivity of a firm (Jasra, Hunjra, Rehman, Azam & Khan, 2011). 4. According to the methodology of “Doing Business”, it is relatively easy to start a business in Pakistan. But a downside to this is employing workers, getting credit, paying taxes and enforcing contracts. Large scale manufacturing is much better suited for the environment in Pakistan rather than SMEs (Chemin, 2010). 5. There are no systems or organizations related to pharmacovigilance in Pakistan, but the pharma industry in Pakistan has a lot of scopes and is improving. The main setback to this industry is a large number of non-qualified and unscientific healers (Quacks) that are operatinganddisruptingtheflowofproperauthenticmedicationinthecountry (Mahmood, Amin, Tahir & Haq, 2011). COMPETITIVE STRATEGY ANALYSIS Corporate strategies will come to play in this part of the business plan as there will be a need for doing market research on the competitors that the company will have to stand out against while it introduces itself in the market (Beamish & Lupton, 2016). Competitive advantage for Australian Natural Care can be devised by the following analysis of its competitors in Pakistan; 1. Bigger companies like Saeed Ghani and The Vitamin Company use print media and TV advertisements the most to help in their marketing campaigns. 2. They use a variety of media like Videos, articles, other types of visual content and buyer guides to showcase their product line. 3. Highly interactive websites that list their products and the links to purchase them are associated with the company using specific keywords. The Australian Natural Care brand will have to create an online presence and then initiate the marketing process through reviews, blog posts and other forms of affiliate marketing to activate their brand in the new market. 7
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AUSTRALIAN NATURAL CARE BUSINESS IN PAKISTAN8 MARKET ENTRY ANALYSIS In the respective order of market entry, this company would enter the Pakistani market as a Late entrant because there are already a few established companies that provide the same products in Pakistan (Rodriguez-Pinto, Carbonell & Rodriguez-Escudero, 2011; Essays, 2018). The products will have to be innovative enough to break into the market with a new look and perspective to set them apart from the ones their competitors offer. The following factors can help discuss the market conditions in Pakistan; 1.Economic Financial Risk: There is a risk of getting credits and properly educated people to get the work done as there is an abundance of skilled, but a lack of properly educated people in Pakistan as the literacy rate is low. But labor and staff can be hired on a moderate salary as the minimum wages in Pakistan are far less than those in Australia. Adequate training of the workforce will be a must for efficient work (Afzal, Malik, Begum, Sarwar & Fatima, 2012). 2.Political-Legal Factors Due to many changes in the Government and military regulations of the country, there is sometimes political unrest. The company may have to tackle issues like law and order reinforcements, temporary shutdowns and insecurity in terms of copyrights and high duty imports as these issues are highlighted in Pakistan’s current political situation under the new rule of Prime Minister Imran Khan. Although these issuesarecurrentlybeingworkeduponduetotheinfluenceofsocialmedia campaigns that give way to revolution, there is still time before the changes become noticeable in the country (Arif, 2014;Rugman, Verbeke & Nguyen, 2011). 3.Analysis of Cultural factors Pakistan is a country blessed with an array of different terrains be it the availability of desserts, mountainous areas and the Arabian Sea along with close proximity to other countries like China, India and Afghanistan. This will prove useful for import purposes as there will be multiple options to get the cargo by Land, sea or water. Apart from these geographical aspects, the people of Pakistan are relatively open to the idea of Natural care products, especially those with skincare benefits as there is a cultural stigma of fair skin in the Asian countries like Pakistan. 8
AUSTRALIAN NATURAL CARE BUSINESS IN PAKISTAN9 4.Technology Related Factors: The implementation of Information Technology helps many companies gain competitive advantage (Dunning, 2013). SMEs in Pakistan contributes 40% to the country's GDP. But even after that, there is a lack of awareness regarding the purchase of data related software that can help in the company's progress. If the AustralianNaturalCarecompanymanagestousethissectorofinformation technology to their benefit they will also gain a competitive advantage as many other brands in Pakistan are not doing the same (Ahmed, Shahzad, Umar & Khilji, 2010). MARKETING AND R&D CONSIDERATIONS This topic is further divided into the following two branches that are associated with each other yet recognized as separate departments to look into while business planning; MARKETING For effective entrance into the market, proper branding and marketing strategies are required that ensure perfect market penetration ensuring success. To create an effective marketing strategy, a marketing mix should be advised describing the adaptation of products and standardizing (Terpstra, Foley & Sarathy, 2012). The marketing mix for Australian Natural Care’s penetration into the Pakistani market can be given through the following points; 1.Distribution Channels Like many other brands operating in Pakistan, Australian Natural Care can choose from either selling its products only through the company website or through the website along with retailers and distributors that make the products available in different pharmacies across Pakistan. The second option is suggested for better reach and availability as it will be of ease to the consumers and wholesalers. 2.Comparative Pricing Strategies The pricing of the products needs to be matched and brought to the level of the competitors to tackle the introductory competition. Differences in the prices can be made onwards after successful international market establishment. 3.Advertising & Promotion 9
AUSTRALIAN NATURAL CARE BUSINESS IN PAKISTAN10 Advertising and promotion can be done on various social media platforms, company websites, TV shows and advertisements, Radio channels and through print media. Cold pitching for the brand can also be done so that more sellers are reached. The most effective modes of advertising in Pakistan are TV and Social Media. 4.Media Research Surveys and other modes of research can be conducted in order to further confirm what the best and most effective marketing strategy and platform will be for the company. It can be done through online surveys, polls and other modes of data collection. 5.Service Quality Issues Feedback for the products and services need to be taken religiously, in the beginning, to further develop and adapt to the social and financial requirements of the Pakistani market. 6.Supply Chain Proper relations with logistics departments across Pakistan and the vendors will help sustain the establishment and success of the company in Pakistan for future. RESEARCH & DEVELOPMENT There will always be more scope of improvement and addition of knowledge and new findings in the Pharmaceutical department all over the world. The purpose of this department would be to create methods of production that will be cost-efficient, better in terms of quality and environmentally sustainable (Paul et al., 2010). Australian Natural Care should keep on searching for ways to innovate their products and adapt them according to the Pakistani environment and government practices to ensure they have an upper hand in terms of market competition. RECOMMENDATIONS REGARDING PRODUCTION Many factors are associated with a lack of proper production facilities in Pakistan (Khan & Khalique, 2014). The following recommendations can be made to further enhance this process; 10
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AUSTRALIAN NATURAL CARE BUSINESS IN PAKISTAN11 1. Tackling the energy crisis in Pakistan by Solar Power and Power saving equipment installation. This will not only save energy and reduce costs but also avoid breaks in production due to energy insufficiency and make the company more sustainable. 2. Production plants to be located in the remote areas of the country so as to be environmentally friendly and to produce without harming the urban or rural settings. 3. Provide skill-enhancing training to the labor that will set this workforce apart from the otherwise uneducated and unskilled labor that the competitors may hire. 4. Pakistan has cheap property options that are available on the outskirts of various cities. Use clever tactics to install production areas in such localities to further reduce the production costs. INTERNATIONAL HRM ISSUES & CONSIDERATIONS Pakistan is a country that battles with low wages, improper working environment for the labor workforce and in justifiable HR practices among many. As there are more than 400 Pharmaceutical companies in Pakistan, there will be huge competition for Australian Natural Care in this country, and Human Resource Management practices also play an important part in giving the companies competitive advantage (Shabbir, 2014). These issues need to be kept in mind when doing business in Pakistan as they have the ability to determine the success of the company. Current labor and other unions are also working towards improving these factors through a variety of campaigns (Ahmad, 2012). The performance management and the organizational culture of a company can be linked as follows; 1. Involvement, where everyone from the Executives, Managers and other employees will be invested in the work and decision making of the company. This will give them motivation and an association with what they do. 2. Consistency, where there will be a set of core values on which the Leaders and employees of the company both work. This will provide stability and consistent work levels to the company. 3. Adaptability, where Australia Natural Care will have to adapt and change its products and packaging along with methods of manufacturing to cater to the Social, Political and Economic settings of Pakistan. The same way they will be modifying 11
AUSTRALIAN NATURAL CARE BUSINESS IN PAKISTAN12 their working terms to suit those of the country, like different office timings for Ramadan, Eid Holidays etc. 4. Mission, where the company will work on implementing and conveying its long and short term missions to its Pakistani employees so that they are on the same page as the Australian workforce. There are a few indicators for Labor market regulations in Pakistan which include but are not limited to Hiring, Working hours, Redundancy rules, Redundancy cost and Job quality. These need to be kept in mind when making the HRM plan for business as they will play an important role in the performance of the company in Pakistan. CONCLUSION The study can be concluded with the facts that were gathered upon research pertaining to International Business Plan in Pakistan for Australian Natural Care. This study discussed the basic factors through which an effective business plan can be constructed including the competitive and marketing strategies along with recommendations for production and HRM practices of the company in Pakistan. The major learning was regarding globalization, which plays an important factor in deciding business in any developing country (Shenkar, Luo & Chi, 2014). Another factor was the critical evaluation of business opportunities in Pakistan and how they can be best utilized for market penetration. The outcome of this research was the understanding of various marketing and other strategies that needed to be implemented along with the proper evaluation of the selected country and type of business that can help the companygain competitiveadvantageand prominentstandingin Pakistanasa newly introduced brand. This analysis can be further utilized in creating a business plan for Pakistani marketplace as it includes all information required and the recommendations that aid in the better running of Australian Natural Care in Pakistan. 12
AUSTRALIAN NATURAL CARE BUSINESS IN PAKISTAN13 REFERENCES Afzal, M., Malik, M. E., Begum, I., Sarwar, K., & Fatima, H. (2012). The relationship among education,povertyandeconomicgrowthinPakistan:aneconometricanalysis. Journal of Elementary Education,22(1), 23-45 [Print] Ahmad,M.S.(2012).Impactoforganizationalcultureonperformancemanagement practices in Pakistan.Business Intelligence Journal,5(1), 50-55 [Print] Ahmed, I., Shahzad, A., Umar, M., & Khilji, B. A. (2010). Information technology and SMEs inPakistan.InternationalBusinessResearch,3(4),237Retrievedfrom http://unpan1.un.org/intradoc/groups/public/documents/apcity/unpan050204.pdf Ali, A., & Ahmad, I. (2016). Environment friendly products: factors that influence the green purchaseintentionsofPakistaniconsumers.PakistanJournalofEngineering, Technology&Science,2(1)Retrievedfrom https://www.journals.iobmresearch.com/index.php/PJETS/article/view/697/0 Ali, A., Khan,A. A., Ahmed, I., &Shahzad,W. (2011). Determinantsof Pakistani consumers' green purchase behaviour: Some insights from a developing country. International Journal of Business and Social Science,2(3), 217-226 [Print] Arif, R. (2014). Social movements, YouTube and political activism in authoritarian countries: a comparative analysis of political change in Pakistan, Tunisia & Egypt Retrieved fromhttps://ir.uiowa.edu/etd/4564/ Beamish, P. W., & Lupton, N. C. (2016). Cooperative strategies in international business and management: Reflections on the past 50 years and future directions.Journal of World Business,51(1),163-175Retrievedfrom https://www.sciencedirect.com/science/article/pii/S1090951615000668 Chemin, M. (2010). Entrepreneurship in Pakistan: government policy on SMEs, environment for entrepreneurship, internationalisation of entrepreneurs and SMEs.International journal of business and globalisation,5(3), 238-247[Print] Dunning, J. H. (2013).Multinationals, Technology & Competitiveness (RLE International Business). Routledge. Essays, UK. (November 2018). The Introduction Of Entry Market Strategy. Retrieved from https://www.ukessays.com/essays/marketing/the-introduction-of-entry-market- strategy-marketing-essay.php?vref=1 13
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AUSTRALIAN NATURAL CARE BUSINESS IN PAKISTAN14 Jasra, J., Hunjra, A. I., Rehman, A. U., Azam, R. I., & Khan, M. A. (2011). Determinants of business success of small and medium enterprises.International Journal of Business andSocialScience,2(20)Retrievedfrom https://pdfs.semanticscholar.org/07c4/a536ae0e721fee13406c42a646fe94a3bfaf.pdf Khan, M. W. J., & Khalique, M. (2014). An overview of small and medium enterprises in Malaysia and Pakistan: past, present and future scenario.Business and Management Horizons,2(2),38-49Retrievedfrom https://pdfs.semanticscholar.org/f888/181d4bf5a5f3952ca08dea80dc3b933baa17.pdf Mahmood, K. T., Amin, F., Tahir, M., & Haq, I. U. (2011). Pharmacovigilance-A needs for best patient care in Pakistan. A review.Journal of Pharmaceutical Sciences and Research,3(11), 1566 Retrieved fromhttp://citeseerx.ist.psu.edu/viewdoc/download? doi=10.1.1.227.8687&rep=rep1&type=pdf McMillan, M. S., & Rodrik, D. (2011).Globalisation, structural change and productivity growth(No. w17143).NationalBureauofEconomicResearchRetrievedfrom https://www.nber.org/papers/w17143 Paul, S. M., Mytelka, D. S., Dunwiddie, C. T., Persinger, C. C., Munos, B. H., Lindborg, S. R., & Schacht, A. L. (2010). How to improve R&D productivity: the pharmaceutical industry's grand challenge.Nature reviews Drug discovery,9(3), 203 Retrieved from https://www.nature.com/articles/nrd3078 Rodríguez-Pinto, J., Carbonell, P., & Rodríguez-Escudero, A. I. (2011). Speed or quality? How the order of market entry influences the relationship between market orientation and new product performance.International Journal of Research in Marketing,28(2), 145-154Retrievedfrom https://www.sciencedirect.com/science/article/abs/pii/S0167811611000206 Rugman, A. M., Verbeke, A., & Nguyen, Q. T. (2011). Fifty years of international business theory and beyond.Management International Review,51(6), 755-786 Retrieved fromhttps://link.springer.com/article/10.1007/s11575-011-0102-3 Salman,F.,&Siddiqui,K.(2011).Anexploratorystudyformeasuringconsumer’s awareness and perceptions towards halal food in Pakistan.Interdisciplinary Journal ofContemporaryResearchinBusiness,3(2)Retrievedfrom https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2449144 14
AUSTRALIAN NATURAL CARE BUSINESS IN PAKISTAN15 Shabbir, M. S. (2014). The impact of human resource practices on employee perceived performance in the pharmaceutical sector of Pakistan.African Journal of Business Management,8(15), 626-632 [Print] Shenkar, O., Luo, Y., & Chi, T. (2014).International business. Routledge. Stutely, R. (2012).The definitive business plan: the fast track to intelligent planning for executives and entrepreneurs. Pearson UK. Terpstra, V., Foley, J., & Sarathy, R. (2012).International marketing. Naper Press. 15
AUSTRALIAN NATURAL CARE BUSINESS IN PAKISTAN16 APPENDICES Chart 01 Source: - Doing Business 2019 Pakistan (World Bank Group). 16